Missed Messages in the Wake of the SVB Collapse
The average business makes hundreds of decisions every day. Some lead to spectacular failure, others to a remarkable gain in trust. In the wake of Silicon Valley Bank (SVB) collapse, an eerie silence spread through the hallow halls of social media. Management teams mostly shied away from commenting on their relationship with SVB, perhaps out of fear of rousing uncertainty among their ranks. Some, ignored the event all together, while others rallied behind the start-ups and small businesses who were impacted.
Those that remained quiet, missed a remarkable opportunity for soft disclosure. Not every news item is worthy of a press release but, using social media or your website to reassure stakeholders, employees, vendors, and investors that “all was ok” can be powerful. The message can be as simple as a “we’re all good” headline on your homepage or a pop-up on your IR page. That’s the first step in crisis communication—acknowledging the event with real-time visibility.
@Roku for instance, revealed in an 8-K that they had 26% of their cash, or $487 million with SVB. Shareholders though, heard via the media, or perhaps, by an email alert. Others, like @Preoptima, a provider of artificial intelligence optimized carbon accounting for architecture and engineering sectors carried on posting marketing content to socials. Another victim of the bank run, @capture6 took to Twitter on Monday March 13, stating: “Like many in our industry, we found out Friday morning that our assets in Silicon Valley Bank were frozen. This was a frightening moment.” But no update on their well-being or how they were managing the crisis.
Some like @YCombinator’s Garry Tan, president and CEO immediately took to Twitter, saying “about one-third of startups with exposure to SVB used SVB as their sole bank account.” Tan, one of the most vocal about the collapse in the immediate aftermath, went on to circulate a petition over that stressful weekend, imploring the government to save small businesses which, Tan claimed made up nearly 40,000 of all depositors at Silicon Valley Bank.
When the news broke on Monday that the Fed would insure deposits, Tan went on to post a note of thanks to the White House, Treasury, FDIC, the Fed, Congress, and California leaders. Tan, who helped launch startups including Airbnb, Reddit and Instacart is still active about the event with regular media appearances, Twitter and LinkedIn postings often referencing, the “scrappy little start-ups fighting to stay alive amid an already challenging fundraising environment.”
In an article in the New York Times, Sara Mauskopf CEO of Winnie, sent an email to all her investors. It began, “Hi investors! Thank you for all the advice from our board and others. As I’m sure you are well aware, the F.D.I.C. closed SVB on Friday. We were not prepared for this to happen. I wanted to provide an update on how Winnie is doing right now.”
History shows that proactive communication is key to alleviating fear and uncertainty. If the so-called “big elephant in the room” is left unaddressed, it can undermine confidence in your company and threaten its ability to calm a potential cascading set of jitters. That’s why, transparency--no matter how difficult in times of crisis--is always the best course of action. Don’t let others shape the narrative for you. Manage the message.
See the full text of the Y Combinator petition here: https://www.ycombinator.com/blog/urgent-sign-the-petition-now-thousands-of-startups-and-hundreds-of-thousands-of-startup-jobs-are-at-risk
See Pioneer Mind’s Founder Mental Health Pledge for Investors and Startup Leaders: https://bit.ly/founder-mental-health
